Economist Proposes Solutions to Naira’s Depreciation

Paul Alaje, a seasoned economist at SPM Professionals, has outlined several measures that could potentially stabilize the Nigerian naira against foreign currencies. Alaje stressed the urgency of addressing the issue, stating that Nigeria’s future hinges on its ability to tackle the problem effectively.

In recent months, the naira has experienced a significant decline in value against major currencies, especially the US dollar. Alaje discussed these challenges during an interview on Channels TV, offering a range of solutions aimed at bolstering the economy.

One of Alaje’s key suggestions is that all payments for crude oil lifted in Nigeria should be conducted in foreign currency. He argued that this approach would directly increase the inflow of foreign exchange into the country, given that crude oil currently accounts for 70% of Nigeria’s foreign exchange receipts.

Alaje also highlighted the need to scrutinize the handling of funds, emphasizing the importance of transparency in financial transactions. He expressed concern that many individuals and entities seem to be hoarding dollars, indicating a lack of confidence in the naira. Addressing this issue, according to Alaje, is crucial to restoring trust in the national currency.

Additionally, Alaje proposed a short-term solution targeting individuals and entities that have no immediate need for foreign currency, suggesting that their holdings should be regulated to prevent unnecessary hoarding.

Looking ahead, Alaje emphasized the importance of transforming Nigeria’s import-export dynamics. He noted that a significant portion of Nigeria’s imports consists of finished products, while the country’s exports primarily comprise raw materials like crude oil. Alaje suggested supporting the manufacturing sector to increase the production of finished goods for both domestic consumption and export, viewing this as a long-term strategy to balance trade.

Daily Trust